Tanzania Daily News (Dar es Salaam)

Tanzania: CRDB to Cross List on Nairobi Bourse

CRDB Bank shareholders welcome the decision to cross list the bank's shares on the Nairobi Stock Exchange (NSE), a move that would expand the market for the bank shares.

Speaking at the bank's Annual General Meeting here in Arusha, shareholders said by crossing onto NSE, the volume of trading the bank's shares will go up, that would ultimately push up the prices, as well as the returns to shareholders.

Mr Iddi Rajabu Chongi from Moshi, Kilimanjaro Region said expanding wings to the Nairobi's bourse was an important step that would help tapping the market opportunities present in the East African Region.

He, however, cautioned the management to take all necessary precautions to ensure there is smooth entrance and growth. Mr Laurean Malauri, a shareholder and stock broker said the business at the Dar es Salaam bourse is small, thus the bank's decision to cross list into another bourse means the liquidity in buying and selling will definitely go up.

"Cross listing of the CRDB stock to the NSE was important because about 50 per cent of the ownership of the shares at the bank is retail, where selling and buying is at most times dictated by circumstances," he said.

But with firms where majority shareholders are large companies, trading of shares has a different structure because they focus on future benefits instead of the short term returns.

Similarly, by lifting restrictions imposed by government on foreign participation at the bourse, this will be an important solution to intensify and make the local market more vibrant.

He said the cross listed firms at the Dar bourse are currently trading low due to restrictions. Some of the cross listed stocks at the Dar bourse are the Nation Media Group, Kenya Airways, East African Breweries, Kenya Commercial Bank and Jubilee Insurance.

However, Mr Abeid Mwasajone expressed worries on how the bank could benefit from cross listing, while prices of the shares are currently very low.

Responding to the question, the CRDB bank Managing Director, Dr Charles Kimei, said with cross listing, the bank will benefit from price discovery because, most shares at the Dar bourse, including CRDB was still undervalued.

"If we were to compute the book value of shares, the CRDB shares could be valued to over 500 shillings from the 310 shillings currently," he noted.

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